Owning property in Costa Rica is much more than just having a deed. Possession is nine-tenths of the law in this country.

Most people believe it is a simple procedure to buy a piece of land in Costa Rica. One just needs to have an attorney check to see if the catastro, or plat plan, exists in the Registro National, Costa Rica’s national registry of properties, and check to see if the property is free and clear of liabilities and other encumbrances, then sign a legal sales document to transfer the property from the seller to the purchaser.

In reality, there is much more involved if you want to be sure your rights are protected.
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First there was arithmetic, and then came new math, and now Costa Rica has introduced tax math.

Aristotle, the Greece philosopher, was the first ever to theorize this kind of geometric mathematics in his book The Physics. So no one should be surprised Tributacion Directa, the Costa Rican tax authority, much like the IRS in the United States, and Hacienda, the Costa Rican treasury, has decided to use it in calculating tax values on property.

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By Garland M. Baker
Special to A.M. Costa Rica

Most people are unaware of the changes to the property registration laws at the Registro Nacional or National Registry which were modified last year. However, these changes have opened the doors to shysters preying on the innocent.

Costa Rica’s registry laws are over 100 years old. This means they were written before computers existed. Because of this, no registration was ever deleted even if it was full of mistakes.

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Property is registered here in Zapote
The Web page is www.registronacional.go.cr

Horror stories abound of property owners not doing their homework or, expressed in legal terms, their due diligence, and losing their property to unscrupulous third parties, including squatters and/or the tax authorities.

The correct registration of a property is the most important element in land ownership and not the deed in Costa Rica. Just because someone appears to be the legal owner of a piece of real estate does not necessarily mean they are.

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Tourists and vendors take advantage of the rest area near the Puente Amistad on the Río Tempisque.

The Puente Tempisque Amistad Taiwan or Tempisque Friendship Taiwan Bridge is much more than just that.

The viewing area is a place for tourists to take pictures, and motorists can see hundreds of people gazing at the structure as if it was one of the Seven Wonders of the World.

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Individuals who own companies face a Catch-22 situation when they decide what they will do with the D-175 tax form.

A November 10, 2003 article explained how this year’s tax form D-175 is a sting operation, of sorts, by Tributación Directa, the Costa Rican tax authority. The idea is to catch all those companies not currently on the tax rolls.

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Have you ever read that the police sent out letters or placed classified ads offering some phony promotion to catch criminals or parking ticket violators? This year Costa Rica’s tax form D-175 is a sting operation of sorts, too.

For many years, in fact since the beginning of transferring property began in Costa Rica, a company could be created and a property could be placed in that company so when the property was sold again, only the company needed to be signed over to the new owner. The sale could be done rapidly and without payment of trasnfer taxes. This kind of company is referred to as an inmobiliaria or a company holding real estate.

However, very few of these entities ever signed up with the tax department, the Tributación Directa. There are an estimated 308,000 companies listed at the Registro Nacional, the national registry. But a far fewer number are listed with the tax department, and the country wants to fix this anomaly so it will be able to collect more taxes in the future.

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